The coronavirus pandemic has triggered human tragedy and economic mayhem, so this reporting season was not expected to be pretty.
However, we've now hit the final week of results and the market is far from a bloodbath.
The All Ordinaries Index (ASX: XAO) actually gained 0.1% last week, while the S&P/ASX 200 Index (ASX: XJO) lost just 0.2%.
It's not like companies are bragging about massive profits, so what's the story?
It seems COVID-19's omnipresence in the media and pre-emptive downgrade of expectations has cushioned any possible shock.
"Although earnings have slumped, this had already been largely anticipated by the market and the actual results have not been a lot worse than feared," BetaShares chief economist David Bassanese told The Motley Fool.
"As has been the case in the United States, equity performance during the latest earnings reporting season is testament to the fact that the market is forward looking."
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'Beats' beat the 'misses'
According to Morgans, the percentage of results that were better than expectations ("beats") was the same as the "misses" among the 50 largest companies in the ASX.
Outside the top 50, the beats actually outnumbered the misses – 34% to 18%.
Morgans senior analyst Tom Sartor said reporting season had so far surprised "overly fearful expectations".
"Ultimately FY20 results disrupted by lockdowns and COVID-related one-offs are less meaningful than usual, particularly given the broad lack of FY21 guidance seen so far," he wrote in a blog post.
"Ongoing company trading updates and the AGM season are going to be far more important than usual, providing us with more catalyst trading opportunities which have worked well for us so far."
Even companies that had missed expectations were still "well supported by the market", according to Sartor.
"Whether this can continue when fiscal support scales down will be a key question as we exit August."
Winning and losing sectors
Market nerves were also calmed by results not showing any surprises in terms of which sectors had done well and which fared poorly.
"Travel and leisure areas obviously [fared] the worst," said Bassanese.
"While the resources sector has been supported by high iron-ore prices related to the V-shaped recovery in the Chinese economy."
Government stimulus had helped prop up spending for ASX-listed retail companies.
This was especially the case for players with "a strong online presence" or specialising in "whitegoods or hardware", according to Bassanese.
The finance sector has been subdued this reporting season.
"But, again, not a lot worse than expected – helped by the fact that as yet there has not yet been a surge in loan defaults," Bassanese said.
"My sense is that both the banks and policy makers will be sensitive to the risk of rising loan defaults caused by high unemployment and will be careful in withdrawing support in coming months if the economy remains weak."
